WPP Q1 growth lags Publicis and Omnicom

WPP posted just 2.9% organic growth in Q1 2023, way below Publicis on 7.1% and Omnicom with 5.2%. Havas posted 1.1%. WPP points out that if it measured organic growth the way Omnicom does the growth rate would have been 4.9%.

Revenue was up to 11.9% to £3.4bn. WPP shares fell in early trading. WPP is sticking with its forecast of 3-5% growth for the year.

CEO Mark Read says: “We have seen a positive start to the year, in line with expectations, reflecting continued spending by clients in communications, customer experience, commerce, data and technology.

“We are continuing to strengthen the company – winning new clients, hiring new creative leadership, investing in our technology platforms and data, making three acquisitions in the growth areas of healthcare and influencer marketing and bringing in a minority partner to FGS Global. Our focus on AI over the last five years is paying off, with many examples of our work with clients, using the main AI platforms, in-market today.

“We remain on track to deliver our full year guidance, thanks to the competitiveness of our offer and our role as a modern, trusted partner to clients in a world further disrupted by technology.”

WPP has, indeed, been busily adding businesses, mostly to its ecommerce offering based on Wunderman Thompson. The latest small acquisition is a sonic branding company.

But its share price must be a worry to Read. WPP, still the biggest ad holding company by some measures, is now valued at around $12bn compared to Publicis’ $20bn, Omnicom’s nearly $19bn and Interpublic’s $14bn, suggesting the market is still unconvinced by growth prospects.

Media, the GroupM operation, remains its biggest business but creative remans a worry and the WPP still has scores of companies doing this and that, acquired acquired in its breakneck acquisition spree under former boss Sir Martin Sorrell.

WPP may have to get smaller to get the share price moving.

This is an amended version of an earlier story.